BREAKING: Supreme Court Upholds Affordable Care Act Subsidies

This is an excerpt of real-time analysis of today’s Supreme Court ruling provided by Sean Marotta, an associate in the Washington office of Hogan Lovells, who focuses on appellate and Supreme Court litigation, and is outside counsel for the American Hospital Association. Marotta will be providing real-time analysis of the ruling on AHA Stat, the association’s blog.

In a 6-3 decision, the Supreme Court Thursday in King v. Burwell upheld the Internal Revenue Service’s rule granting subsidies to people who purchase plans through the federally facilitated Exchanges, established under the Affordable Care Act.

In an opinion delivered by Chief Justice John Roberts, the Court held that the ACA’s subsidy provision was ambiguous, but that the broader structure and purpose of the Act necessarily led to the conclusion that subsidies are available for all people, regardless of the type of exchange they use to purchase health insurance. Justices Antonin Scalia, Clarence Thomas and Samuel Anthony Alito dissented.

The court’s ruling clearly understood what patient advocates had said from the start: That denying subsidies to patients in states with federally facilitated exchanges would severely harm—or even destroy—health reform. The court began by outlining the ACA’s three core reforms: (1) guaranteed issue and community rating, which ensure that patients are not denied insurance or made to pay more for insurance because of pre-existing conditions; (2) the individual mandate, which requires most of all adults to obtain health insurance; and (3) tax subsidies, which make private health insurance affordable for low- and moderate-income Americans. The court then framed the question before it as whether these three reforms apply equally in all states, no matter who establishes the state’s exchange. Framed that way, the court was bound to answer “yes.” However, the court emphasized that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

AHA President and CEO Rich Umbdenstock called the ruling “a significant victory for protecting access to care for many of those who need it,” in a statement. “America’s hospitals will continue to advocate for coverage for all, an essential part of better health and better health care for Americans.”